Nogger's Blog

09/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.07, down 25 1/2 cents; Mar 12 Soybeans closed at USD11.16 1/2, down 25 3/4 cents; Dec 11 Soybean Meal closed at USD275.50, down USD7.20; Dec 11 Soybean Oil closed at 49.34, down 86 points.

On the week as a whole beans fell 28 3/4 cents, meal USD10.90 and oil 71 points. These were 14-month front month closing lows for beans and 18-month lows for meal.

The USDA raised US ending stocks to 230 million bushels, 35 million up on last month and 16 million more than the trade was expecting. The move came by virtue of a cut in the US crush of 10 million bushels and a reduction in exports of 25 million bushels. World ending stocks were pegged at 64.5 MMT, up 1 MMT on November's estimate.

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Corn: Dec 11 Corn closed at USD5.85 1/2, down 4 1/2 cents; Mar 12 Corn closed at USD5.94 1/4, down 6 cents. Corn was a cent lower on the week.

The USDA pegged US ending stocks at 848 million bushels, 5 million up on last month whereas the trade was expecting a fall to 831 million. World ending stocks were raised from 121.6 MMT to 127.2 MMT, which is 5.3 MMT higher than the average trade forecast and 4 MMT above the highest trade estimate.

The EU-27 corn crop was raised 1 MMT to 63.9 MMT, whilst Chinese production was upped 7.25 MMT to a record 191.75 MMT.

Fund money was seen exiting around 9,000 contracts in a combination of both the day and night sessions as specs continue to pull out of corn. Rising open interest in the USD5.00/bu March corn put suggests that an increasing number of players are turning bearish on corn.

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Wheat: Dec 11 CBOT Wheat closed at USD5.73 1/2, down 3 1/4 cents; Dec 11 KCBT Wheat closed at USD6.53 3/4, up 3 1/4 cents; Dec 11 MGEX Wheat closed at USD8.43, down 1 3/4 cents.

On the week Chicago was 38 3/4 cents lower, with Kansas down 22 1/4 cents and Minneapolis down 13 cents.

Chicago wheat closed at the lowest for a front month since July 2010 after a slew of bearish numbers from the USDA.

Argentina, Australia and Canada all had their production estimates raised placing world output 5.7 MMT higher than last month to a new record high 689 MMT.

World ending stocks were also raised far more than most of the trade expected, up nearly 6 MMT to 208.5 MMT - the highest in twelve years and less than 2 MMT away from being the highest ever.

Things would have looked even worse for wheat had the USDA not resisted the temptation to raise Russian and Kazakh production estimates in line with those from the FAO.